Moving And Applying For A Mortgage Without A Job

Q: I recently read two of your books and have a question. My husband and I live on the East Coast and are trying to move to the Midwest. I have contacted a buyer broker in our new state and have been pre-qualified by a national lender (in the local East Coast office near where I live) for a home purchase in our new state. I also have a hefty cash down payment ready to use for a house purchase.

The buyer broker told me that I would not be able to buy a home in my new state without having a job and a pay stub from a job in the local area.

I don’t understand this. My husband and I have made the commitment to move and are looking for new jobs in our new state. Can we buy a home out of state with the intent to reside in the state within 60 days?

Is this buyer broker just brushing me off because I live out of state? I want to buy a home before I move to our new state and start work. Is this possible? I don’t know if this matters, but this is my first home purchase.

A: You say that you’ve been prequalified to purchase a home in your new state. However, that prequalification was probably based on you continued employment at your current job. The income and job used to prequalify you and your spouse for this purchase will not be available to you when you move. I’m not sure whether you made this clear to your lender during the prequalification process.

Also, prequalification is a far cry from getting preapproved for a loan. In the preapproval process, you actually apply for the loan and go through the verification process. It’s possible that your lender didn’t realize you were moving halfway across the country, or figured that in the prequalification process, that didn’t matter.

The fact that you’re moving without a job is problematic if you intend to buy a house. If you quit your job and then try to close on a house, you may not be able to at the last moment. That would be a disaster for you and the sellers.

If you’re trying to close on your new home before November 30, 2009, in order to take advantage of the up to $8,000 tax credit for first-time buyers, you should intensify your job hunt so that you won’t have a problem qualifying for the mortgage.

As for the buyer broker, perhaps this was the message he or she was trying to convey. In the current mortgage market, you might not qualify for a loan without having a job or enough assets to put up as collateral. Perhaps the buyer broker didn’t want to spend a lot of time with buyers who may ultimately not be able to afford a home.